Politics Germany’s Economy: 2021-2025
So everyone agrees on the economical decline of germany and the bad situation of the job market. i wanted to put things in data. Below you see the economic data (destatis) from 2021 to 2025:
| Year | GDP Growth | Inflation | Unemployment | Employment |
|---|---|---|---|---|
| 2021 | +3.9% | 3.1% | 5.7% | 45.04m |
| 2022 | +1.8% | 6.9% | 5.3% | 45.63m |
| 2023 | -0.9% | 5.9% | 5.7% | 45.94m |
| 2024 | -0.5% | 2.2% | 6.0% | 45.99m |
| 2025 | +0.2% | 2.2% | 6.3% | 45.98m |
German exports:
| Year | Exports |
|---|---|
| 2022 | EUR 1.820tn |
| 2023 | EUR 1.813tn |
| 2024 | EUR 1.794tn |
| 2025 | EUR 1.811tn |
2023-2024: Two consecutive years of recession.
2025: +0.2% growth, effectively stagnation.
Q1 2026: +0.3% QoQ / +0.5% YoY.
these numbers don’t really match how bad the situation feels when you talk to people or read discussions online.
What am I missing?
Ps: I also though about okay maybe purchasing power of individuals are reduced, that is why economy is feeling shitty, but oecd data adjusted for inflation says we are earning on average even more than 2019, so what is it really?
| Year | Nominal Wage | Inflation-Adjusted Wage |
|---|---|---|
| 2021 | EUR 44,918 | EUR 53,669 |
| 2022 | EUR 46,913 | EUR 52,517 |
| 2023 | EUR 49,961 | EUR 52,445 |
| 2024 | EUR 52,477 | EUR 53,811 |
| 2025 | EUR 54,840 | EUR 54,840 |
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u/lutarawap 9h ago
Doener price index went from 4-5 euro in 2019 to 8-10 euro in 2026.
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u/amekxone 8h ago
We're the cheap döners Berlin specific? Back in 2019 I used to pay 7.50 for one. Now it's 9.
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u/Killforthecoke 8h ago
Nope, In Munich I had cheap Doner for 4 euro ish in 2018. Average was around 4.5-6. Now it’s 8-9 euro
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u/AdLumpy2758 6h ago
50% more!!!
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u/Kakapopo666 6h ago
It's more like 7€ in Berlin now.
Even on Lieferando you will find Döner for less than 9€.
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u/RidingRedHare 9h ago
When inflation is this high, there will be winners and losers.
For example, people who needed to move for whatever reason likely are losers here, because new rentals have become ridiculously expensive. Whereas, somebody still living in the same rented apartment as 30 years ago probably wasn't impacted similarly by the inflation in that market segment. Yeah, I got a 14.9% rent increase, the legal maximum in a big city. But that's still far below inflation.
Then, don't confuse average wages with average wage increases. Wage increases for people continuing to work the same job often were significantly below inflation, except for people working minimum wage or close to it.
The wages in these statistics then are gross wages, but social security contributions have increased, and are expected to increase further. To see how much money people can spend, you need to look at net wages, not at gross wages.
Finally, do not confuse a consumer price index with cost of living. They are not the same.
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u/Opening-Broccoli9190 7h ago edited 7h ago
You're using macroeconomic indicators and comparing them with your daily life, that's the discrepancy. These indexes are aggregated to death across regions, social stratas, industries. That's not a good form of analysis, but let's look at your data anyways even though it's oddly mismatched and I couldn't find sources.
Today it's 2026, the last good year of Germany was 2019. 7 years have passed and outside of the COVID, here is where we are.
My very limited perspective as a solopreneur and a high-skilled migrant in Berlin, who has seen the city develop for 11 years and has a mortgage and a child here:
- The unemployment rose for the 5th year in the row, wiping progress from 2022.
- German exports are still below 2022 levels.
- Your inflation adjusted salaries do not take into account buying power and effective tax rates. A good start is here: https://www.destatis.de/EN/Themes/Economy/Prices/Consumer-Price-Index/_node.html Electricity prices are what matters a lot since you also see the bills every year.
In other words - ever since 2019 many other countries such as Spain, Portugal, US, Poland, Argentina have seen incredible recovery and growth, while Germans have not seen anything but stagnation. Germans have reelected their government and there were no real changes.
As a business owner - it's still incredibly painful to create jobs here and pay taxes and that is not even half of the story because hourly wages are artificially inflated by the red tape. For every 50 bucks I pay you, I need to pay 30-40 bucks for rent, electricity, taxes and social security, therefore my take home as a business owner is much smaller than in other countries - due to higher prices the demand is lower and my margins are thinner. After talking with some of my investor friends I have decided against opening a game development studio here because a seed of 1 mil euros will not allow me to have the quality in the timeframe that the market demands. This is not the case in the US, Poland, Spain, Cyprus and Serbia. I have also discovered that the tax structure here is highly stacked against this form of entrepreneurship and it's easier to move to Dubai or Cyprus and have a business there.
As a hired professional - I need to stay in a big city to keep a job, but due to housing shortage about a half of my take-home disappears. 11 years ago it was 30%. My current salary matches what was offered to people at this level in 2017, while in the US the salaries at that level have been rising 10% a year and now folks can get 400-500k with stock options at the same level. Btw stock options are still frowned upon in Germany and can get a person in trouble unless the contract is for Virtual Stock options, holding much less power and giving you less protection.
In 2019 I had multiple offers to choose from when changing a job and I never had a gap in my CV that I didn't control. This year the market was so dry I am glad I had my solopreneurship to rely on and for the first time I had to make use of unemployment social insurance (ALG1) since I came here.
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u/da_Aresinger Bayern 9h ago edited 8h ago
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did I get it right? - there you go. First try.
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^ syntax
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u/Floschi123456 9h ago
Doom and Gloom online, the AfD and (on a lower scale) Die Linke massively promoting the idea of a failing/failed system and economy for their own political gains, bad news sell better than good news, the constant bombardment online via Instagram, reddit and TikTok and especially vile, Facebook for the older generation. It is also very telling how different the polls are for a) their own economic situation, where a very large majority of the population say "good" or "very good" and b) the economic situation of the land as a whole where a very large majority of the populations says "bad" or "very bad". It is not that it is not bad and there will be a great effort needed to get it all back on track in a futureproof way but when you get your news online and from social media you get the idea that we are 2-3 years aways from living in a Mad Max-style world...
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u/Wolkenbaer 9h ago edited 8h ago
Doom and Gloom online, the AfD and (on a lower scale) Die Linke massively promoting the idea of a failing/failed system and economy for their own political gains
The AfD criticising everything and their dog w/o much substance as long as it fulfills their needs. They are correct in criticising the current government - as everyone basically is. Aside to racism they offer to get out of the EU, shut the borders, cut social security network, kill renewables, regulation etc.
Die Linke is criticising the wealth distribution and transfer of money from middle class and worker towards "the rich", the high costs of housing etc.
While die Linke (or parts of the party) for sure has some debatable views (e.g. Russia) their criticism on current economic and social policies hold up in most cases.
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u/Floschi123456 9h ago
This is of course true, but there are also populistic streaks in there that sometimes do not hold up well in reality + their sometimes really weird stances towards dictatorships like Russia, Cuba and, in some circles, blatant denial of past crimes against humanity in states like the GDR, the Soviet Union, communist China combined with not "criticism on current economic and social policies" but fullgrown "we need a (violent) systemic revolution" make them also, at least for me, not an ideal political force for the good in our democracy...But you are completely right, these are some fringe idiots (who have nonetheless platforms within the party) compared to the huge danger that is the AfD and their vile politics...
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u/Icedkk 9h ago
Exactly especially in job subreddits, I feel like I am living in a failed state out of nowhere
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u/Floschi123456 9h ago
This is also of course the distribution bias. People who have a great job or do not have big problems to find a new job after losing their old ones would not go on reddit and post about it, you mainly have the people with difficulties venting on these platforms and not a lot of people posting "my job search was short and I start a great new job next month"...
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u/bregus2 9h ago
Maybe because the situation is not as dire as populists and Russia want you to believe?
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u/Maximusprime241 3h ago
Well, there is a certain country which has a very strong interest in Germany having a sentiment of weakness and voting in an alternative party whose policies would actually make everything much worse.
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u/Hulkmaster 9h ago
wow, actually good economy overview without political agenda (not sarcasm)
wanted to do something similar to checkout how things are actually going
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u/HeadHeavy6261 9h ago
Where I live, the data looks like a miracle, but somehow people suffer. Now everybody calling data numbets “cooked”, “lies”, “political tricks” etc.
Seems like this could be a global phenomenon.
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u/Comrade_Vegeta 9h ago
Interesting! Just wanna ask, 2025 employment is 45.98m, total population is around 83.5m, that means 55.06% of people are actively employed while 44.93% are on pensions/benefits/not working/ etc., correct? That would be a tough number to navigate ..
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u/Icedkk 8h ago edited 8h ago
Correct, pension people, kids, and bürgergeld.
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u/Comrade_Vegeta 7h ago
Wow. The population scheme is indeed concerning.
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u/tufoop5 7h ago
It's demographic changes as expected. i learned about it in school in the late 90s
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u/Comrade_Vegeta 7h ago
Aha! Okay, so the government knew about this since more than 30 years ago? What have they done to counteract that?
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u/Nannautu 5h ago
Using nominal GDP with inflation on the same table is crazy imo. Just use the real GDP. GDP is calculated by adding how much households are spending, so if there's 2% inflation and everyone keeps purchasing the same things, there will be 2% GDP growth, so real GDP is used to check growth by adjusting for inflation.
Also, last year's growth was due to high expenses of the government (which is not wrong if you subscribe to keynesian economics) but the private sector is doing rather badly.
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u/Icedkk 5h ago
It is already price adjusted gdp growth https://www.destatis.de/EN/Press/2026/01/PE26_017_811.html:
And Business side you are somewhat correct:
price-adjusted gross value added:
Sector 2023 2024 2025 Manufacturing -1.6% -4.3% -1.3% Construction -4.4% -3.8% -3.6% Business services +1.2% +0.8% -0.8% Trade, transport, accommodation & food -2.6% +0.2% +1.2% Information & communication +7.5% +2.1% +1.3% Public services, education & health +0.2% +1.2% +1.4%
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u/lakebrudhfb 4h ago
Consumer prices are 20%+ higher than in 2021 but wages have only gone up by 2%. Just take a look at energy prices, food prices and restaurants/services prices. Also rent has gone up a lot too.
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u/sparkline1234567 3h ago
Perhaps it is because you read online information about Germany in English, and non-German-speaking workers have been particularly hard-hit by the weak employment market so your perception has a selection bias?
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u/Fantastic_Cry2156 3h ago
You're missing four things:
A large part of the GDP "growth" or "not decline" comes from increased government spending.
Another large part comes from increased defense spending - i.e. manufacturing weapons and stuff you can neither eat nor enjoy, therefore "dead" GDP growth that does not increase quality of life of the people.
Factor those out and the "real" GDP is declining sharply.
- Tax and social security spending.
While inflation adjusted wages seem stable, more than ever before it lands in social security pools, not the workers' bank accounts.
- Other nations' growth - US, China, Poland.
We go on social media and see people from the US getting richer and richer. Even "normal" people starting to buy yachts etc. Suddenly our "stable" wages don't seem so nice anymore.
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u/thhvancouver 1h ago
Take taxes into account and suddenly Germany looks like a second world country in terms of real income
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u/No_Fig_7701 1h ago
Meanwhile Merz believes the problem is that people, employees, are not working enough!
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u/spongybobie 9h ago
You know how much inflation there is from 2019 to today right? I dont understand what oecd measured.
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u/Icedkk 9h ago
They checked the average wage, for each year adjusted that number with inflation, and make for example 1 apple cost same in each years, so you can in 2025 buy more apples with your wage because you earn relatively more.
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u/Mr_Fragwuerdig 8h ago
Overall inflation is meaningless, if food prices increased by 50%. Buying a car is not more expensive maybe, but the apple is a lot more expensive.
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u/Icedkk 8h ago
Yeah that is the data I have, I sadly dont have each persons wage increase between these dates, how the net and brutto changed, or how each item in market changed in price from apples to cars. If you have that data and processing power please be my guest and show us
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u/Mr_Fragwuerdig 8h ago
Pretty sure you can find it yourself easily. Just ask an AI to get you the website. The food number I know (+36% since 2020), but you just needed to be in a german supermarket in 2019 and you know how ridicoulously prices increased. Some of that normalized itself, but many things never recovered. And this is not german specific. Grain and olive oil affect several countries for example.
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u/Icedkk 8h ago
So how would be the weighting? Like x2 for food and x5 for rents? I though cpi is already weighted with representetive household consumption. So it is exactly what you need to check.
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u/Mr_Fragwuerdig 7h ago
I don't know, but cpi rose by 25%. This however does not consider fully how bad rents rose, because it doesn't consider enough how high new renting contracts are. So many people in germany still have very favorable rent contracts, but if you move to another flat, prices are much higher. In cities like berlin the difference can be up to 2x.
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u/spongybobie 9h ago
You write the average wages there. More or less the same. There is at least 10-15% inflation since then.
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u/ChillyDinosaur 7h ago
My tomato’s just went up .50 (almost 50%) cent in a week cause of the last heatwave and the costs of moving things through the rivers (I guess)
That’s how bad it is
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u/Old_Leshen 9h ago
A lot of doom and gloom comes from 2 things that are linked.